The future looks bright for UK SMEs in London and the South East, reveals Azets inaugural SME Barometer

August 16, 2021

Azets, the UK’s largest regional accountancy and business advisors to SMEs, with office throughout the South East including in Cambridgeshire and Northamptonshire, has today launched its inaugural SME Barometer findings.

The research, which was undertaken in April and May 2021, surveyed 760 Azets SME clients from a wide range of sectors across the UK and the Nordics (401 in the UK). It revealed that despite the economy, Covid-19 and competition ranking in the top three threats for UK SMEs overall, 71 per cent in London and the South East feel positive about the UK’s economic outlook over the next 12 months and over half (60%) expect their profits to increase. Brexit remains firmly on the agenda in all regions apart from London and South East where competition, the economy and Covid-19, in that order, were seen as bigger threats.

There are further positive signs for SME growth and jobs across the UK as a whole with over half (56%) expecting to recruit more staff over the next year and 60 per cent intending to invest over the next year.

While 71 per cent of London and South East SMEs feel positive about the UK’s economic outlook, this compares with 60 per cent in Scotland and 59 per cent in the North East, North West and Yorkshire and Humberside. However, overall, the future for UK SMEs looks bright with 89 per cent in London and the South East saying they expect to be trading in a year’s time. Four per cent in this region said they’re unlikely to be trading and six per cent were unsure.

As the UK went into lockdown last year, the government stepped in to support businesses during the pandemic. On balance across the UK, SMEs felt well supported (71%).

Other key findings from the report on SMEs in London and the South East: 

• UK SMEs in London and the South East ranked (in order) their business models, the economy and international trade as their top three opportunities
• Financial health, adapting their business models and talent/skills acquisition were ranked as the top three priorities
• 25% of SMEs in this region had staff on furlough
• 37% of SMEs in this region had received liquidity assistance
• 71% of SMEs in the region have felt well supported by the government during the pandemic
• 33% of SME business leaders in London and the South East say they have a poor work/life balance with 28% saying they spend over 13 hours a day working on or thinking about their business.

William Payne, Regional CEO for London and the South East, Azets, concluded: “This, our first SME barometer, was conducted against a backdrop of uncertainty and upheaval. Now, with the vaccination programme accelerating across the UK and the rest of Europe and lockdown restrictions easing, SMEs are feeling much more optimistic about the prospect of an economic recovery and the service sector in particular here in the South is showing stronger and faster signs of recovery. However, much uncertainty remains. In summary, our research highlighted a stubborn optimism among SMEs about the prospects of recovery, coupled with a pragmatic awareness of the need to adapt to the ‘new normal’ post-Covid world.

“The biggest opportunity as well as the greatest threat for SMEs will be to adapt their post-Covid business model to this new world, using technology and flexible working. Those who get this transition right will be in a much better position to survive and thrive. It is vital that the SME sector continues to adapt and prosper as the economy recovers, and these findings point to areas where further government policies are vital in delivering the support businesses need post-Covid as well as  post-Brexit.”